Carnival Corporation has reduced its annual profit forecast as rising fuel costs place pressure on the cruise operator’s margins amid heightened geopolitical tensions affecting global energy markets.
The increase in fuel prices follows attacks on oil and transport facilities in the Middle East and disruptions to energy flows through the Strait of Hormuz, a strategic shipping route that carries roughly one-fifth of the world’s oil supply. The instability associated with the ongoing conflict involving Iran has tightened supply and pushed crude prices higher, creating additional operating costs for energy-intensive industries such as maritime passenger transport.
Cruise operators depend largely on heavy fuel oil and marine gas oil to power their vessels and often use hedging strategies to stabilise costs through financial contracts. Carnival remains the only major United States-based cruise line that does not hedge fuel purchases, leaving it more exposed to fluctuations in global oil prices.
The Miami-based company now expects full-year adjusted earnings of approximately US$2.21 per share, compared with its earlier guidance of up to US$2.48. The outlook assumes Brent crude will average about US$90 per barrel for the remainder of April and May, falling to US$85 in the third quarter and $80 in the fourth quarter rather than reflecting spot market levels.
Shares in the company declined about three percent in early trading following the announcement and have fallen roughly 17% since the beginning of the year.
Company leadership indicated that reservations for 2026 had increased at a double-digit rate, strengthening what was already described as a record booking position for the remainder of the year. Strong demand for voyages has also supported revenue performance, with the company exceeding market expectations for first-quarter revenue and profit.
Carnival stated that operational improvements, including higher yields and lower non-fuel operating expenses, were expected to generate nearly US$150 million in gains, partially offsetting more than US$500 million in additional fuel costs anticipated for the year. The company also announced a US$2.5 billion share buyback programme.
Elsewhere in the sector, Norwegian Cruise Line Holdings has warned that uncertainty surrounding fuel costs may weigh on its annual results, while Royal Caribbean earlier projected profits above estimates, citing strong early demand during the industry’s peak booking season.